Remuneration Committee Charter

Functions and responsibilities

The Remuneration Committee is a committee of the Board with its principal functions being:

  1. To review and recommend to the Board the overall strategies in relation to executive remuneration policies;

  2. To review and make recommendations to the Board in respect of the compensation arrangements for the Managing Director, all other executive directors and all non-executive directors;

  3. To review the effectiveness of performance incentive plans; and

  4. To review and make recommendations to the Board in respect of all equity based remuneration plans.

In consultation with the Managing Director, the Committee will review and recommend the Company’s general approach to compensation to the Board for approval and will oversee the development and implementation of the compensation regime.
 

Composition

The Committee shall comprise at least three members of the Board, the majority of whom will be non-executive directors. Directors serving on the Remuneration Committee should have diverse, complementary backgrounds. The Chairman of the Committee shall be an independent director.

The Company Secretary will be the secretary of the Committee and will act as the principal liaison between executive management and the committee on remuneration matters.
 

Meetings

The Committee shall meet as frequently as required, but at not less than once a year.

The Committee shall have access to professional advice.

Two members of the Committee shall comprise a quorum. Where only two members are present, the unanimous vote of the two members will constitute an act of the Committee. Where the Committee comprises more than two Committee members, the vote of a majority of the members present will constitute an act of the Committee.
 

Remuneration policy

This policy governs the operations of the Remuneration Committee. The Committee shall review and reassess the policy at least annually and obtain the approval of the Board.
 

General director remuneration

Shareholder approval must be obtained in relation to the overall limit set for directors’ fees. The directors shall set individual Board fees within the limit approved by shareholders.

Shareholders must also approve the framework for any equity based compensation schemes and if a recommendation is made for a director to participate in an equity scheme, that participation must be approved by the shareholders.
 

Executive remuneration

The Company’s remuneration policy for executive directors and senior management is designed to promote superior performance and long term commitment to the Company. Executives receive a base remuneration which is market related, together with performance based remuneration which is met out of a profit sharing pool on a calendar year basis.

Overall remuneration policies are subject to the discretion of the Board and can be changed to reflect competitive market and business conditions where it is in the interests of the Company and shareholders to do so.

Executive remuneration and other terms of employment are reviewed annually by the Remuneration Committee, having regard to performance, relevant comparative information and expert advice.

The Committee’s reward policy reflects its obligation to align executives’ remuneration with shareholders’ interests and to retain appropriately qualified executive talent for the benefit of the Company. The main principles of the policy are:

  1. Reward reflects the competitive market in which the Company operates;

  2. Individual reward should be linked to performance criteria; and

  3. Executives should be rewarded for both financial and non-financial performance.

The total remuneration of executives and other senior managers consists of the following:

  1. Salary - executive directors and senior managers receive a fixed sum payable monthly by electronic funds transfer;

  2. Bonus - executive directors and nominated senior managers are eligible to participate in a profit participation plan if deemed appropriate;

  3. Long term incentives - executive directors may participate in share option schemes with the prior approval of shareholders. Executives may also participate in employee share option schemes, with any option issues generally being made in accordance with thresholds set in plans approved by shareholders. The Board however, considers it appropriate to retain the flexibility to issue options to executives outside of approved employee option plans in exceptional circumstances; and

  4. Other benefits - executive directors and senior managers are eligible to participate in superannuation schemes.

Remuneration of other executives consists of the following:

  1. Salary - senior executives receive a fixed sum payable monthly by electronic funds transfer;

  2. Bonus - each executive is eligible to participate in a profit participation plan if deemed appropriate;

  3. Long term incentives - each senior executive may participate in share option schemes which have been approved by shareholders; and

  4. Other benefits – senior executives are eligible to participate in superannuation schemes.

Non-executive remuneration

Shareholders approve the maximum aggregate remuneration for non-executive directors. The Remuneration Committee recommends the actual payments to directors and the Board is responsible for ratifying any recommendations, if appropriate. The maximum aggregate remuneration approved for directors is currently $200,000.

Non-executive directors are entitled to long term incentives - each non-executive director may participate in share option schemes which have been approved by shareholders; and 

All directors are entitled to have their director’s liability insurance paid by the Company.
 

Profit participation plan

Performance incentives are offered to executive directors and senior management of the Company through the operation of a profit participation plan.


This policy is reviewed annually.

Return to Diploma Group Corporate Governance.